Hospice patient count nearing zero

The San Diego Hospice and Palliative Care Center, once the nation’s leader in hospice care with close to 1,000 patients, has transferred out nearly all its patients and expects to have none remaining by the end of the month.

News of the rapid unwinding of the hospice came during hearings on Wednesday and Thursday that are part of the hospice’s Chapter 11 bankruptcy proceeding.

The pace of the dissolution of the business angered lawyers representing creditors, and also seems to have squelched attempts for any bidder for the business other than Scripps Health.

Interest in purchasing some or all of the hospice’s business by for-profit health care companies Gentiva and Vitas has essentially vanished, since most of the hospice’s patients have found care elsewhere.

Jeffrey Isaacs, the lawyer for the hospice, told U.S Bankruptcy Court Judge Margaret Mann Thursday that the hospice had 450 patients when its bankruptcy petition was filed Feb. 4. By the end of next week, no patients will be in its care, he said.

He estimated Scripps will get about 230 of the patients, and 160 will go to other providers. An additional 60 will have died. He also said the offer from Vitas was fraught with problems and that Scripps made a better offer than Gentiva.

Samuel Maizel, the lawyer representing a committee of unsecured creditors, told Mann that the hospice has been intent on steering as many patients to Scripps in as short a time as possible.

That has meant that the transaction with Scripps will foreclose the possibility of another bid from a rival buyer — which could provide more money that creditors with claims for unpaid bills and services could get.

The hospice has been under a Medicare audit relating to allegations that it admitted patients and kept them in care in violation of Medicare guidelines. The hospice could face millions of dollars in fines, and when word of the audit spread the number of patient referrals plummeted, aggravating the hospice’s finaincial condition and forcing it into bankruptcy.

In court papers, the creditors committee pegged the value of the hospice business as between $7 million and $17 million. Scripps is getting it “for nothing,” Maizel wrote. The quick moves also mean the hospice has not upheld its fiduciary duty to creditors, he said.

Scripps has also made a $10.7 million opening bid for the hospice’s eight-acre property in Hillcrest, which has several buildings, including a 24-bed hospital that Scripps has said it will continue to use if its bid is highest.

In mid-February, Mann gave tentative approval for Scripps and San Diego Hospice to begin the work of transferring patients who elect, in writing, to make the switch.

Scripps also planned to lease the hospice’s laptop computers with patient information on them for $53,000 and provide $5 million in financing for the hospice to continue operations. Both of those motions were withdrawn Thursday.

Isaacs said the Scripps no longer needs the laptops, and that the hospice does not need the money to make payroll.